The Council of Ministers has approved the regulatory development of the Deindexation Law of March 2015, which seeks to decouple the revision of prices of goods and services in the public sector from the IPC. This law was pending regulatory development for full application. In the regulation approved today the exceptions in which revisions are allowed are assessed and the requirements to be met for these cases are established, for example, that the review reflects a cost structure based on the principles of efficiency and good business management . This avoids that the Administration or the users of public services have to bear the costs of those business practices that are not the best in the market.

The Law establishes as a general rule the prohibition of indexing with the objective of avoiding the so-called “second round effects” and inflationary inertia. This protects the general economic activity from inflationary outbreaks, by preventing them from moving between different sectors of the economy and becoming permanent. Thus, certain prices in which the public sector intervenes, such as bus tickets, train, highway tolls, medicine prices, regulated gas or electricity prices may not be indexed with respect to the CPI. Modifications of these prices will cease to be automatic depending on the evolution of inflation and may only vary when there are other causes that have been previously justified and accredited.

The law excludes salary negotiation, pensions and the issuance of public debt from its scope.

Exceptionally, the possibility of indexing is allowed in cases where this mechanism is necessary and efficient; that is, whenever this review reflects, in the most appropriate way possible, the evolution of the costs of the activity in question. Specifically, the regulation regulates the set of monetary values ​​that can benefit from the periodic review regime based on specific price indices. Three types of monetary values ​​are included in the list. First, some regulated energy prices such as the butane cylinder, the rate of last resort of natural gas, the transport and distribution of electricity or the Voluntary Price for the Small Electricity Consumer (PVPC). Second, the leases of real estate in which the public sector intervenes. Third, contracts, for example works, and long-term public sector concessions, that is, those that require large investments and therefore a recovery period for such investments that exceed five years.

These indexations will generally be carried out by means of previously assessed formulas that must be justified by a cost structure based on the principles of efficiency and good business management. Only the indispensable and significant costs for the activity and whose evolution is unpredictable will be considered. Individual prices or specific price indices reflecting those costs should be used. It is not allowed to index financial costs, depreciation, general and structural expenses, or industrial profit.

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